Twitter 1, Musk 0.
In the scoring of the legal battle between Twitter (TWTR) and Tesla (TSLA) CEO Elon Musk, the microblogging website has just taken the lead.
The social-media platform filed a lawsuit in Delaware Chancery Court after Musk -- following almost three months of drama -- withdrew his $44 billion acquisition offer.
Twitter, which wants the courts to force Musk to keep his commitment to acquire the site, had asked for an expedited trial, set for mid-September. Musk asked the court to set Feb. 13, 2023, as the earliest trial date.
Chancellor Kathaleen McCormick has just granted the first victory, a major one, to Twitter. In a July 19 teleconference, McCormick ruled for an expedited hearing.
The trial will take place over five days in October, the court ruled, siding with Twitter's arguments that delays will further harm its business. The decision is thus close to Twitter's request.
Musk Lost Big
The platform on July 12 had asked that the trial be held over four days in mid-September. That's because the merger agreement between the two parties provides that if the deal is not finalized before Oct. 24, either of the two parties can terminate it free of charge.
"Defendants’ ability to terminate the agreement before the presumptive drop-dead date of Oct. 24, 2022, is extremely limited and carefully circumscribed," Twitter said in its lawsuit. [You can find it here.]
"There is no right for defendants to terminate unless there is a breach sufficiently significant to cause failure of a closing condition, which, after due notice, is either incapable of being cured or is not cured within 30 days after such notice."
"Twitter has suffered and will continue to suffer irreparable harm as a result of defendants’ breaches," the platform alleged.
In their response to Twitter's complaint, filed on July 15, Musk's attorneys were asking that the trial not be held until Feb. 13, 2023, at the earliest.
"Plaintiff’s proposed schedule would severely prejudice defendants by depriving them of a meaningful opportunity to take discovery, conduct expert analysis, and present their case," lawyers for the billionaire wrote in their motion. [You can read it here.]
"The only relevant date is the outside date for the debt financing, April 25, 2023. Accordingly, defendants respectfully request trial on or after February 13, 2023, an extremely rapid schedule for a case of this enormous magnitude that provides the court time for reasoned adjudication before the true outside date," they argued.
In his letter withdrawing his proposed acquisition of Twitter, Musk accused management at the social network of having lied about the number of fake accounts, known as spam bots, present on the platform.
Twitter has always estimated that fake accounts represent less than 5% of its users. Musk estimates that figure to be at least 20%.
Twitter shares at last check were trading just shy of $40, compared with Musk's proposed acquisition price of $54.20 before he changed his mind.
